Why U.S. Housing Shortage Estimates Range From 1.7 to 7.3 Million

In April 2023, The Wall Street Journal looked at why estimates of the U.S. housing shortage differ so much. The figures it compared ran from 1.7 million homes, the estimate from John Burns Research & Consulting, to 7.3 million from the National Low Income Housing Coalition. Realtor.com put the number at 6.5 million, Fannie Mae at 4.4 million and the policy group Up for Growth at 3.8 million. The country has about 142 million housing units.

The spread comes from each group asking a different question. Realtor.com compares household formation since 2012 with single-family homes started in the same years. Once apartments and condominiums are counted, its gap drops to 2.3 million. The coalition counts rentals affordable to households with extremely low incomes and finds 7.3 million too few, even though it also finds more rental units than renters overall. Fannie Mae measures homes affordable to people earning up to 60% and up to 120% of their area’s median income, and says rehabilitating existing homes is often cheaper than building new ones. Up for Growth adds the households it believes would have formed if housing had been available, based on household formation by age in 2000. The Journal noted that later marriage and more years in school could explain some of those missing households.

John Burns, working from demographics and vacancy rates, reached the lowest figure. If his number is right, the article said, a few years of steady construction could close the gap.

Eastlake Real Estate Partners builds rental housing in Seattle. Its approach to new supply is described on the investors page.

This is our summary. The full article by Josh Zumbrun appeared in The Wall Street Journal on April 14, 2023.